SAN DIEGO FINISHES CATCHING UP ON AUDITS

City’s data system fixed, streamlining process, officials say

San Diego 
San Diego is all caught up on its audits for the first time since 2009, clearing the way for the city to borrow money for financing road repair, sewer systems or other infrastructure needs.

The City Council this week unanimously approved its latest audit, which was conducted by Macias, Gini & O’Connell. The approval paves the way for the city to be on time with its audits for the foreseeable future, according to officials.

A $50 million financial management system designed to streamline the process actually delayed the fiscal 2010 audit by nine months, resulting in the fiscal 2011 audit to be delayed by two months.

Ken Witfield, the city comptroller, said the glitches have been fixed and reporting processes have been streamlined to produce financial data just weeks after a month’s end.

The larger problem stretches to 2004.

“It’s the first time (since then) we can really say comfortably that we’re up to date … we really feel that we’ve slew a lot of dragons along the way,” he said.

Delays on audits have caused the city problems in the past. San Diego was shut out of the municipal bond market for four years during the pension and accounting scandals of the mid-2000s, and until it caught up on delayed audits in 2009.

It was on schedule for about a month before it fell behind once more.

City officials have said the current delayed audit shouldn’t affect the city’s ability to borrow money because it kept rating agencies apprised of the situation.

Councilman Todd Gloria, chairman of the city’s budget committee, said that having the audit completed and being on track for timely future audits was an important step for the city to have open financial processes.

“We’re not done, let’s not get confused — no one’s going to stop the pressure, the oversight or the hard work, but my goodness this is good news,” he said.

Not all of the council members were satisfied with the audit.

Councilman and mayoral candidate Carl DeMaio criticized the report for not honing in closer on the $898 million backlog of infrastructure repairs.

“When we look at these numbers, I think that it’s important that we dive deeper into the issues that are not on the balance sheet but that are under people’s cars (or) under their feet when they walk on crumbling sidewalks — the infrastructure,” he said.

The city’s Chief Operating Officer Jay Goldstone said infrastructure costs are a moving target that the city plans to address by spending $100 million annually for the next five years.

A council committee recently voted to ramp up infrastructure spending even more, but some officials cautioned that the city not overextend itself.

The next audit for fiscal 2012, which ends June 30, will be due the weekend before Thanksgiving.